India’s firmer attempts at mineral diplomacy

Context: As India seeks to expand its
manufacturing and technological capability, critical minerals will become vital
to fulfil this ambition. However, India, a major critical mineral importer,
still depends on other countries, primarily China, for its mineral security,
which has become a cause of strategic concern. India established the Khanij
Bidesh India Ltd. (KABIL), a joint venture company with a mandate to ensure a
consistent supply of critical and strategic minerals to the Indian domestic
market, its objective was to achieve mineral security by securing agreements,
and acquisitions through government-to-government, government-to-business, and
business-to-business routes.

Key points

·      
Overview: Reliance
on critical mineral imports, especially from China, poses strategic concerns.
To address this, the Indian government is advancing its Mineral Diplomacy to
enhance security and reduce strategic vulnerabilities.

·      
Mineral diplomacy: Mineral
diplomacy refers to a nation’s strategic efforts to secure critical mineral
supplies through international partnerships, trade agreements, and
resource-sharing initiatives, ensuring economic stability and reducing
geopolitical vulnerabilities.

·      
India’s Mineral Diplomacy of 2024: To
coordinate efforts in securing access to critical minerals both domestically
and internationally. It focuses on enhancing resource mapping, accelerating
exploration activities, and developing resilient supply chains for minerals
vital to India’s industrial and green energy targets.

Ø 
International Partnerships -
India is actively engaging with resource-rich countries, particularly in
Africa, to secure essential minerals. This includes participation in the
Mineral Security Partnership (MSP) and bilateral agreements like the
India-Australia Critical Minerals Investment Partnership, which are designed to
fortify supply chains and position India as a key player in global mineral
diplomacy.

Ø 
Domestic Reforms -
The Mines and Minerals (Development and Regulation) Amendment Bill, 2023 allows
private sector participation in exploring critical minerals. This reform is
expected to boost domestic supply and reduce reliance on imports, aligning with
India’s goal of achieving self-sufficiency.

Ø 
Geopolitical Context -
As global competition for critical minerals intensifies, India’s mineral
diplomacy is not just about securing resources but also about establishing
itself as a significant player in the clean energy economy.

Ø 
Focus on Recycling -
The mission prioritizes recycling critical minerals from electronic waste and
used batteries, ensuring resource efficiency and sustainability amidst limited
reserves.

Ø 
Investment in Technology -
India plans to leverage advanced technologies such as AI and machine learning
for geological mapping to enhance exploration efforts.

·      
Strategic objectives of ICMM: India’s
Critical Mineral Mission aims to secure a stable supply of essential minerals
for its economic and technological growth. The strategic objectives include-

Ø 
Reducing Import Dependency -
By decreasing reliance on imports, particularly from China, India seeks to
enhance its mineral security and mitigate economic risks associated with
geopolitical tensions.

Ø 
Enhancing Domestic Production -
The mission focuses on boosting domestic exploration and production
capabilities for critical minerals, thereby fostering self-sufficiency.

Ø 
Facilitating Recycling and
Sustainable Practices - Emphasis is placed on recycling
critical minerals to ensure a sustainable supply chain while addressing
environmental concerns.

·      
International partnership to enhance
mineral supply chains: India is actively engaging in
international partnerships to enhance its mineral supply chains through several
strategic initiatives-

Ø 
Bilateral Agreements -
India has established partnerships with resource-rich countries like Australia,
Argentina, and Kazakhstan to secure supplies of lithium and cobalt. For
instance, KABIL signed a memorandum of understanding with Australia for lithium
and cobalt projects.

Ø 
Joint Ventures -
The formation of joint ventures, such as IREUK Titanium Limited with
Kazakhstan, aims to develop production capabilities within India, thus
integrating into the global supply chain.

Ø 
Multilateral Engagements -
India is participating in multilateral initiatives like the Quad and the G-7 to
align with global best practices in mineral security and facilitate knowledge
sharing.

·      
Challenges in mineral diplomacy: Despite
the positive outcomes of India’s mineral diplomacy, several challenges hinder
its effectiveness-

Ø 
Lack of Private Sector Participation
- The absence of a clear roadmap for private sector
involvement in the critical minerals supply chain limits India’s ability to
leverage domestic capabilities fully.

Ø 
Weak Diplomatic Capacity -
Insufficient diplomatic resources and expertise in mineral diplomacy pose
challenges in forming sustainable international partnerships.

Ø 
Need for Comprehensive Strategy - A
cohesive strategy that integrates private sector roles and addresses supply
chain vulnerabilities is essential for enhancing India’s mineral security
efforts. The current lack of such a strategy hampers effective engagement with
international partners.

·      
Way forward: Develop
a Comprehensive Critical Minerals Policy - Formulate a cohesive strategy
integrating private sector participation, incentivizing domestic exploration,
and addressing supply chain vulnerabilities.